Tuesday, April 16, 2024

Foreign direct investment worth US $31.5B announced for Mexico so far in 2024

Foreign direct investment (FDI) of more than US $30 billion is in the pipeline based on announcements made by private companies so far this year.

In the first 2 1/2 months of 2024, private firms announced their intention to invest $31.51 billion in Mexico, according to the Economy Ministry (SE).

The figure is $5.67 billion higher than that reported previously by the SE for the first two months of the year. The ministry said in a statement that the investment announced between Jan. 1 and March 15 is expected to show up in official FDI data in the next two to four years.

Private companies made a total of 73 investment announcements in the period and their projects are expected to generate 39,192 jobs, the SE said.

Well over half of the total investment — 57% — will come from the United States, Mexico’s largest trade partner and source of FDI. Mexico’s next biggest investors based on announcements made so far this year are Germany (17% of the total), Argentina (14%) and China (6%).

The lion’s share of the money — 54% — will go to the manufacturing sector, while the mass media, commercial and transport sectors are set to get 16%, 15% and 14%, respectively.

Automotive factory worker
The majority of the promised investment is destined for the manufacturing sector (Gob MX)

The SE highlighted that 18% of the new investment will go to Querétaro, 14% to México state, 10% to Nuevo León and 5% to Puebla. The other 53% will be divided between other states.

The ministry also highlighted five “main” investment announcements in early 2024. The companies that made them were:

  • E-commerce company Mercado Libre ($2.45 billion)
  • Retailer Walmart ($2.13 billion)
  • Auto parts manufacturer IKD ($178 million)
  • Auto parts maker Minth Group ($173 million)
  • Pharmaceutical company Carnot ($142 million).

Earlier this year, the SE said that investments announced by Coca-Cola bottler and convenience store owner FEMSA ($9.96 billion); Amazon Web Services ($4.96 billion); and DHL Supply Chain ($4 billion) were the three largest in 2024.

They remain the top three investment announcements of 2024, while Mercado Libre and Walmart occupy fourth and fifth place, respectively.

The FDI announced in the first 2 1/2 months of the year is only $4.55 billion less than the total investment recorded in 2023. FDI in Mexico was $36.06 billion last year, according to preliminary SE data, although investment announcements totaled well over $100 billion.

While Mexico is benefiting now from the growing nearshoring trend, it can expect to see more concrete benefits in coming years as the investment recently announced by foreign companies begins to flow into the country.

Scores of companies — including automakers Tesla and Kia, steelmaker Ternium and energy firms Mexico Pacific Limited and Woodside — made multi-billion-dollar investment announcements last year.

Mexico News Daily  

Have something to say? Paid Subscribers get all access to make & read comments.
Beer kegs stacked on shipping pallets

Mexico’s agricultural exports off to a booming start in 2024

January and February exports were up compared to the same period in 2023 — which was itself a record-setting year.
A Volvo truck driving down a highway

Volvo to build truck manufacturing plant in Mexico

The United Auto Workers (UAW) labor union in the U.S. said it was "extremely disappointed" by the news.
Mexican peso bill and US dollar bills

Peso loses momentum against the US dollar, after hitting strongest rate since 2015

The weaker position on Friday represented a 1.8% decline for the peso compared to its closing position of 16.44 to the US dollar on Thursday.